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Q3 Shows Signs of Effective Foreclosure Prevention Actions

foreclosuresThe government-sponsored enterprises (GSEs) completed 539,451 foreclosure prevention actions during the third quarter of this year, according to new data from the Federal Housing Finance Agency (FHFA).

The total number of GSE loans in forbearance plans totaled 1.04 million by the end of the third quarter, which accounted for roughly 3.66% of the total loans serviced and 79% of the total delinquent loans. The third quarter also had 230,714 initiated forbearance plans, a substantial drop from the 1.51 million recorded in the second quarter.

Furthermore, the FHFA reported that 20% of modifications enacted by the GSEs in the third quarter were modifications with principal forbearance, while modifications with extend-term only accounted for 64% of all loan modifications during this three-month period. There were also 924 completed short sales and deeds-in-lieu during the quarter while foreclosure starts fell by 10% to 6,809 as third-party and foreclosure sales increased 75% to 1,794 in the third quarter.

The 60+ days delinquency rate in the third quarter was 3.58%, down from 4.08% in the second quarter. The GSEs’ serious delinquency rate – for loans that were delinquent 90 days of more – was 3.14% at the end of the third quarter – and the FHFA noted this level was much lower than the serious delinquency rates for the Federal Housing Administration loans (10.76%), Veterans Affairs loans (5.77%) and the industry average (5.16%).

The FHFA’s data was followed by a data report from Black Knight Inc. that found the number of mortgages in active forbearance rose by 37,000 over the seven-day period ending Dec. 15. Black Knight stated that 5.3% of all mortgages – approximately 2.79 million – are in forbearance as of Dec. 15, representing a total of $563 billion in unpaid principal, while more than 550,000 forbearance plans were set to expire by the end of December.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.
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